loves2splooge said:
jarrod said:
loves2splooge said:
You have to seriously wonder whether Sony and Microsoft are in this business to make money. All these price cuts to gain an edge over each other and for what? When does Sony plan to recoup all the money they lost with the PS3 (especially when their corporation as a whole is in the red) and when does MS plan on recouping all the money they spent on the Xbox brand? |
Microsoft's fine, and they see Xbox strategically as competitive floodwall to safeguard their Wintel empire. As long as PlayStation exists, they'll keep pouring money in, profitable or not. And believe me, they have cash to spare and then some.
Sony's in a more precarious position, they're not near as financially sound as Microsoft and (before this gen) PlayStation was seen as one of their profit centers. I think PS3 was planned a trojan to help Blu-ray supplant DVD, but I also don't think they expected to sacrifice near this much in the process. Plus they also had to dilute their ownership in Blu-ray significantly to get traction with parnters, to the point where they're not even the top license holder in the group anymore (Matsushitsa is, Sony's 2nd). It's been a bit of pyrrhic victory for Sony, but I don't see them ever giving up either.
Really though, both Sony and Microsoft see their games businesses as proxies for media hubs and other content businesses, so they'll keep chipping away at it regardless of profit and because the end gain is so attractive. The only hardware company that really seems to be in the industry primarily for the industry (ie: games) is Nintendo. I miss Sega, Hudson and SNK. :/
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Sony is in the more precarious position for sure. But MS has to watch out for the interests of their shareholders too. Microsoft is very profitable but their stock apparently isn`t exactly that great these days. For a company like Microsoft that has grown so much over the years, that growth had to slow down eventually though. You can`t have rising stocks all the time. But you know how shareholders are. Its all about, "what have you done for me lately?" with them.
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Yeah, but whenever the shareholders get pissy, Microsoft just starts doing favorable buybacks and options. They like to "moneyhat" everyone it seems. lol.
Plus, I'd say Xbox is out of the woods at this point, it's actually seen as an attractive business by shareholders these days and it's been shouldering the struggling Zune business too. Microsft won't ever need to "account" for the previous losses on Xbox 1, and 360's profitable now and will likely be profitable overall by the time the generation ends. That's probably the best they could've hoped for, and is how Microsoft seems to prefer entering new markets (loss with the first model, profit with the second, takeover with the third).
